Employers in the financial services sector must connect with Generation Y – the next generation of graduates, according to the Association of Graduate Recruiters.

Speaking at the Financial Services Skills Council conference, Carl Gilleard, chief executive of the Association of Graduate Recruiters, said sector needed to fully understand the underlying traits of Generation Y.

HR executives and bosses were told they should be prepared to make adjustments to their graduate marketing, recruitment and development strategies to remain competitive.

He warned employers who fail to take steps to properly understand the market that they risk running up against a brick wall of distrust and cynicism, which may damage their brand and cause them to lose their competitive advantage.

Gilleard said: “This ‘connected’ generation have grown up with computers, show no fear of technology, take risks and are media savvy and brand conscious.

“Most importantly, this in an online generation, whose new social spheres are social networking sites such as MySpace and FaceBook.

“It is no surprise to hear that some employers in the UK are already tapping into networking tools. GCHQ, the intelligence service, has launched its first jobs podcast in conjunction with the Guardian.

“In order to connect with Generation Y, employers need to engage with both schools and universities to ensure they are communicating with these potential recruits early.”